IS THE FUNGIBILITY OF HEALTH SECTOR AID A CAUSE FOR CONCERN?

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Author

Adams, Taylor Jade

Abstract

The fungibility of health aid funds has been identified in several studies. The significance of this unintended effect on recipient government behavior is not clear, though it is commonly considered negative. This paper seeks to expand upon previous findings by identifying if there is a correlation between fungibility and lack of democratic values, government corruption, or high aid dependence. I hoped to identify or rule out correlations that demonstrate that fungibility of aid is a concerning characteristic of today’s development practice. While some studies have found that fungibility is predicted by measures of democratic values, such as being a democracy or having a free press, the findings have not been consistent. In my model, I found that having a free press and lower inequality seems to reduce fungibility, while being a democracy seems to increase it, though I believe the latter observation is due to outliers in the data. I found that high corruption is a marginally significant predictor higher fungibility, while high aid dependence was not a significant predictor of fungibility.